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Social learning with differentiated products.

Learning from friends is a key process by which consumers acquire information about available products. This article embeds social learning in a model of firms producing differentiated products. I consider how the structure of social relationships between consumers influences pricing and welfare. In...

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Published in:RAND Journal of Economics (Wiley-Blackwell) Vol. 50; no. 1; pp. 226 - 249
Main Author: Campbell, Arthur
Format: Article
Published: Wiley-Blackwell Spring2019
Subjects:
Learning
Social learning
Consumers
Commercial products
Pricing
Online Access:View this record in EBSCOhost
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        au: Campbell, Arthur
        affil: Monash University
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        Learning
        Social learning
        Consumers
        Commercial products
        Pricing
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          Learning
          Social learning
          Consumers
          Commodity Contracts Brokerage
          Commodity Contracts Dealing
          Commercial products
          Pricing
      ab: Learning from friends is a key process by which consumers acquire information about available products. This article embeds social learning in a model of firms producing differentiated products. I consider how the structure of social relationships between consumers influences pricing and welfare. In particular, how a variety of characteristics of social networks ‐ distribution of friendships, homophily, clustering, and correlations between an individual's preferences and number of friends ‐ influence these outcomes. I also find conditions under which consumer awareness and the sensitivity of demand to prices are useful measures of the informational efficiency of markets.
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    language: English
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